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Friday, May 04, 2007

"US$ Weakness Remains Focal Point"

MarketWatch reports on the markets. "Gold futures closed near $690 an ounce Friday to mark their strongest finish in nearly two weeks as the U.S. dollar fell against major currencies in the wake of data that showed the smallest increase in payroll employment since November 2004."

"'The U.S. dollar's ,' said Peter Spina, an analyst at GoldSeek.com. 'Gold will push up against the $700 resistance and either see another rally fizzle or see a large wave of momentum kick in and take this market much higher.'

"Still, Spina said the outlook is unclear. 'I am unable to foresee which route we are headed as the bears and bulls struggle to get the upper hand.' For now, 'the market remains firm on pullbacks, so the inevitable break of $700 is just a question of when,' he said."

"Gold for June delivery gained $5.30 to close at $689.70 an ounce on the New York Mercantile Exchange, its highest closing level since April 23. On Thursday, gold futures gained $9.30, the benchmark contract is up $7.90, or 1.2%, for the week."

"'Look for continued strength as the day wears on, but keep a keen eye on next week as all market participants will be back in full force and as the Fed watching gets under way,' said Jon Nadler, analyst at Kitco Bullion Dealers. The Federal Reserve will meet Wednesday."

"'A test, if it comes, of the $695 area [for gold] may succeed this time around,' said Nadler."

"The dollar's weakness contributed to gold's latest rise. The greenback edged lower after the Labor Department said that non-farm payrolls expanded by 88,000 in April, less than the 100,000 expected by economists surveyed by MarketWatch. See full story.The euro was last up 0.3%, while the dollar was down 0.2% vs. the yen. See Currencies."

"'Earlier speculation that U.S. jobs growth may reveal the weakest number in some 24 months, became a stark reality,' said Nadler. 'This news further undercut the dollar and extended expectations that next week's Fed meeting will result in (at least) a continuation of the thus far neutral stance on dollar rates that it had to adopt due to the conundrum posed by rising inflation and sluggish growth (in certain sectors of the economy)."

"So 'gold once more became a bet to the long side for funds (if not quite yet for the individual investor who may seek a validation of above $695 to join the party),' he said. 'Spot bullion rose by $4.50 as soon as the news hit the wires.'"

"Silver also strengthened. July silver added 2 cents to finish at $13.53 an ounce after a one-week high of $13.70. But it was down 0.3% for the week."

From Bloomberg. "Platinum rose the most in two weeks in New York on increased demand from automakers that use the metal to make pollution-control devices. Palladium fell."

"Consumption of platinum for catalytic converters rose 6.5 percent last year to a record 4.2 million ounces, London- based research company GFMS Ltd. said in a report April 25. Before today, platinum had gained 15 percent this year. China's car sales surged 25 percent last year, boosting demand."

"Platinum futures for July delivery gained $23.70, or 1.8 percent, to $1,334.50 an ounce on the New York Mercantile Exchange at 9:20 a.m., the biggest gain since April 20. The price rallied 3.2 percent this week after dropping 3.6 percent last week, the biggest weekly drop since December."

"Palladium for June delivery dropped $1.50, or 0.4 percent to $375 an ounce on the Nymex. Before today, most-active futures had gained 11 percent this year."